Research Papers

1. Research Paper Finance E-ISSN No : 2454-9916 | Volume : 4 | Issue : 12 | Dec 2018
AbhaniDharaK.
Assistant Professor (MBA), N. J. Sonecha Management & Technical Institute, Gir Somnath (Gujarat).
18International Education & Research Journal [IERJ]
INTRODUCTION:
Microfinance is more emerging concept in today's era. It is a handy source of
money that is far away from the basic financial services. Microfinance compa-
nies can be registered themselves as Nonbanking financial company under the
companies Act. Microfinance, additionally called microcredit, is a sort of man-
aging an account benefit that is given to jobless or low-pay people or gatherings
who generallywouldhaveno differentaccesstomonetaryadministrations.
th
The roots of the microfinance are grounded in the 18 century. The first
microcredit was provided by Jonathan Swift, for the betterment of the people in
Irish. The first bank who promoted this concept was “Grameen bank” in the year
1976 byMuhammadYunus inBangladesh.
In 2006, the Nobel Peace Prize was awarded to both Yunus and the Grameen
Bankfor theirefforts indevelopingthemicrofinancesystem.
Afew organizations empower loan specialists to pick precisely who they need to
help, arranging borrowers with criteria, for example, dimension of neediness,
geographic district, and kind of private venture. Others are explicitly focused:
There are associations in Uganda, for instance, that attention on giving ladies the
cash-flow to embrace ventures like developing eggplant and opening small
cafes. A few organizations center their endeavors just on organizations whose
objective is to enhance the general network through activities, for example,
offering education, training for the job, and working towards a better environ-
ment.
CONCEPT OF MICRO FINANCE:
Micro finance is one type of the provision for those who are having the lacking of
the basic financial services. It includes the basic banking services like savings
account,loansandadvances, insurance,moneytransferetc..
BRIGHT SIDE OF MICRO FINANCE:
Ÿ It is a provision for the family of the people who are not having basic finan-
cialservicesthatcanimprovetheirstandardofliving.
Ÿ Itfavoursthosepartsof societywho areignoredfromthesocietallevel.
Ÿ Itexpandsthesky oftheinvestmentfor thefutureaspect.
Ÿ Itsuccessfullyexplainstheimportanceof thesavingconcepttothepeople.
Ÿ It's a helping hand for the needy people, so it can reduce the stress level of
them.
Ÿ Its psychologicalbenefitisthat,peoplefeelstheyalsomattersinthesociety.
Forms of Micro finance:
1. Microloans: Microloans (also known as microcredit) are loans that have a
small value; most loans are less than $100 in size. These loans are generally
issued to finance entrepreneurs who run micro-enterprises in developing
countries. Examples of micro-enterprises include basket-making, sewing,
streetvendingandraisingpoultry.
2. Microsavings: Microsavings accounts allow individuals to store small
amounts of money for future use without minimum balance requirements.
Like traditional savings accounts in developed nations, micro-savings
accounts are tapped by the saver for life needs such as weddings, funerals
andold-agesupplementaryincome.
3. Micro-Insurance: Individuals living in developing nations have more risks
and uncertainties in their lives. For example, there is more direct exposure to
natural disasters, such as mudslides, and more health-related risks, such as
communicablediseases.
Different types ofMicrofinanceinstitutions inIndia:
1. Joint Liability Group (JLG) :Joint liability group is one type of informal
group consist of 4-10 members in it. Most of the time these people are jointly
applying a loan from the bank for the agricultural purpose. In short farmers
and rural workers are included in this category. Moreover in this category
every individual is equally liable for the credit taken. These kinds of institu-
tionsareverysimpleintheirstructure.
ABSTRACT
Indiais developingcountry. Many of thepartsof thecountrystillnotthatmuchprogressed. For thesolutionof thesaidproblemMicrofinancecanbecometherayof the
hope for country.This paper was presented with the intention of exploration of the area of the Micro finance in India.Though the term micro finance is not new but still
much more progress is required. Those who live in backward areas and are remote from the basic financial services, can get the employment and financial services
under the micro finance. NABARD plays a vital role in development of this sector. Micro finance institutions are in various forms but the Self Help Group form is the
most popular one. It may be in the form of micro credit, micro insurance etc.As per the recent published report by NABARD in 2018 the Self help groups- bank linkage
programme, reached to 11 crore household through 87 lakh SHG with deposits of Rs. 19500 crore. Government has introduced EShakti programme for the
improvementin this sector. Eshakti is a mobile applicationthrough which history of the SHG can be recorded. Moreover financialand non financialtransactions can be
inserted, maintained, modified etc. It is a part of the digitalization. In this paper I tried to derive the maximum recent scenario of this sector. By analysing the
governmentreportIcanassurethatifthissectoris moremotivatedthenitcansurelybecomeoneofthereasons ofdevelopmentofcountry.
KEYWORDS: MicroFinance,NABARD, Selfhelpgroup(SHG), EShakti
ANEMPIRICALSTUDYONTHECURRENTSCENARIOIN
THEFIELDOFMICROFINANCE
Copyright© 2018, IERJ.This open-access article is published under the terms of the Creative CommonsAttribution-NonCommercial 4.0 International License which permits Share (copy and redistribute the material in any
mediumorformat)andAdapt(remix,transform,andbuilduponthematerial)undertheAttribution-NonCommercialterms.

2. Research Paper E-ISSN No : 2454-9916 | Volume : 4 | Issue : 12 | Dec 2018
2. Self-Help Groups (SHG): Self-Help Groups (SHG) is the most popular
form of the Micro fiancé. It is the formal and informal group of small entre-
preneurs having similar kind of background. Sometimes these groups tem-
porarilycreatedandgeneratethecommonpoolofmoney.
3. The Grameen bank model: The Grameen model was introduced by the
Nobel Laureate Prof. Muhammad Yunus in Bangladesh in 1970. It has
widelyadoptedinIndiaas RegionalRuralBank(RRB).
The goal of this institution is overall development of the economy especially
of those backward areas of the country. But this model was not quite success-
ful.
4. Rural Co operatives: Rural Cooperatives was started by Government at the
time of independence. Due to the complex structure it has not so successful
.moreoveritisnotcoveringlargesectionofIndia.
LITERATURE REVIEW:
Ms. Madhavi Kodamarty and Ms. Ranjani Srinivasan worked on Micro finance
and woman empowerment: Evidence from India- Review of literature, in the
year February 2016. Principle focus was given to the literature reviews. By
depicting different literature reviews they tried to elaborate the condition of
micro finance co relates with woman empowerment. They provide positive and
negative and challenges related with the woman empowerment. In the conclu-
sion they agreed with positive correlation between the micro finance and woman
empowerment.Moreoverpositiveimpactwas mainlyintheareasofincome,sav-
ings, employment days, household consumables etc. In the end they also open up
thescopeof furtherstudyinthisarea.
Ms. Madhavi Kodamarty had prepared a report on Microfinance and Women
Empowerment: Self Perception of Beneficiaries - A Study With Reference to
Gandhinagar District of Gujarat in the January 2016. In the report she presented
the data regarding various demographic factors like caste , age group, marital sta-
tus, type of family, no of children and education level. Some of the conclusion
were like this. Among the survey members 54 % of the participants belong to
minority community followed by 39% of Other Backward Class.The majority of
respondents are young members in the agegroup of 18-25 and 26-35 years. 96%
of the respondents are married and 4% being widow. 76 % of the surveyed
respondents have nuclear families where as 24 % still live in joint families.
Majority of the respondents have two children (52%), whereas only 9 % have
more than three children. Majority of the surveyed respondents have completed
their elementary education i.e. 37%with secondary education and 33% with pri-
mary education. Then she did the factor analysis. At last she concluded that
respondents are positively coping with the micro finance. In nutshell given an
increase in income will have the spill over effect on the overall welfare of the
microfinancebeneficiaryhousehold.
Padmalochan mahanta, Gitanjali Panda and Sreekumar has presented their
research work in November 2012 named as Status of Microfinance in India- A
review : in the International Journal of marketing, financial service and manage-
ment research. In the paper initially they explained the role of NABARD with
concern to SHG. Then in the latter stages the area covered was mainly the theo-
retical framework of micro finance and its role in the global concern. So mainly
the paper was divided in to the three parts; very first the role of micro finance and
its association with other countries, secondly role played by NABARD and other
financial institutions in the development of microfinance and lastly its role in
makingthelegislationinframingthelaws andpractices.
Manish Kumar, Narendra Singh Bohra and Amar Johari had studied the Micro-
Finance as anAnti Poverty Vaccine for Rural India, in the year November 2010.
Their main goals were To analyze the growth of microfinance sector developed
in India and see potential for the microfinance institutions, NGOs, SHGs in the
market, To analyze the structure and pattern of microfinance programme in rural
Indian by the MFIs, NBFCs,To understands the marketing of microfinance prod-
ucts in rural market, To study the importance and role of microfinance in poverty
alleviation and profitable agriculture activities. Some of the results were found
like this 350 million Below Poverty Line, 95 % have no access to microfinance,
56 % people still borrow from informal sources, 70 % don't have any deposit
account, 87 % no access to credit from formal sources, Annual credit demand is
about Rs.70,000 crores, 95 % of the households are without any kind of insur-
ance, Informally Microfinance has been in practice for ages. In short they con-
cludetherearemorepotentialfor themicrofinanceinIndia.
Current scenario in the field of Microfinance:
Proud fully NABARD declared that today the Self help groups- bank linkage
programme, reached to 11 crore household through 87 lakh SHG with deposits of
Rs. 19500 crore. The Self Help Groups Bank linkage (SHGBLP) program which
began just as a bank outreach programme, has through the progression of time
gradually transformed into a comprehensive programme for money related,
financial, social and recently, innovative capital working in provincial zones.
Accordingly the SHG-Bank Linkage Program has extended at a quick pace in
India to advance into the biggest microfinance program on the planet, and with-
outadoubt,itisthefundamentalmicrofinanceprograminIndia.
Recently Government of India has initiated to transform the country to the digital
one. NABARD has launched a pilot project for promoting Self Help Group
(SHG) named as “E Shakti” in March 2015. To begin it started in 2 districts i.e.
Ramgarh(Jharkhand)andDhule(Maharashtra).
It was designed to capture the social, demographic and financial profiles of mem-
bers as well as the SHGs, together with member identification details like
Aadhaar, Voter ID, etc. and uploading the same on to a dedicated website
https://eshakti.nabard.org. The project envisaged mapping of all the existing
SHGs; bankwise,branchwise andblockwiseinthe2 districts.
Objectives of E Shakti:
Ÿ Digital book Keeping i.e. computerized answer for defeat the troubles relat-
ingtobook keepingandtheboardofrecordsoftheSHGs.
Ÿ Building an effectively accessible database and producing imperative MIS
forthefinanciersforassumingeducatedpraisechoices.
Ÿ Concurrent evaluating of SHGs to empower the banks to proficiently credit
connectthequalifiedgatheringsandfurthermorescreenthem.
Ÿ Providing a full scale picture of SHG-BLP for the arrangement creators to
push forwardtheirformativemotivation.
Ÿ Offering complete straightforwardness to every one of the partners, particu-
larly the poor SHG individuals, for expanding their trust in dealing with the
cashandtherecords.
Ÿ Potentialtorecognizewhetheranybodyis apartinmorethanoneSHGs.
19 International Education Research Journal [IERJ]
Overall progress of SHG-Bank linkage Programme during last three years.
Particulars
2015-16 2016-17 2017-18
No. of SHGs Amount No. of SHGs Amount No. of SHGs Amount
st
SHG Savings with Banks as on 31
March
Total SHG Nos.
79.03
lakh
13691.39
Crore
85.77
lakh
16114.23
Crore
87.44
Lakh
19592.12
Crore
All women SHGs
67.63
Lakh
12035.78
Crore
73.22
lakh
14283.42
Crore
73.90
Lakh
17497.86
Crore
Loans Disbursed to SHGs during the
year
Total No. of SHGs extended loans
18.32
Lakh
37286.90
Crore
18.98
lakh
38781.16
Crore
22.61
Lakh
47185.88
Crore
All women SHGs
16.29
Lakh
34411.42
Crore
17.16
lakh
36103.13
Crore
20.75
Lakh
44558.74
Crore
Loans Outstanding against SHGs as on
st
31 March
Total No. of SHGs linked
46.73
lakh
57119.23
Crore
48.48
lakh
61581.30
Crore
50.20
Lakh
75598.45
Crore
No. of all Women SHGs linked
40.36
Lakh
51428.91
Crore
42.84
lakh
56444.24
Crore
45.49
Lakh
70401.73
Crore
Source: Status of Micro finance in India report 2017-2018 NABARD

3. CONCLUSION:
At last I can conclude that developing country like India has a very good scope of
development only the requirement is to promote the concepts like micro finance
more and more. Many of the women get the employment because of the develop-
ment in this area. Our honourable prime minister have also tried to encourage this
areaandtriedtoexplaintheimportanceofthemicrofinancetothepublic.
REFERENCES:
1. Kodamarty, M. (JANUARY2016). Microfinance andWomen Empowerment:Self Per-
ception of Beneficiaries - A Study With Reference to Gandhinagar District of Gujarat.
Internationaljournalofscientificresearch,Volume:5| Issue :1| ISSN No 2277-8179.
2. Ms. Madhavi Kodamarty, Ms. Ranjani Srinivasan (February 2016) . Microfinance and
Women Empowerment: Evidence. International journal of applied research , Volume :
6| Issue :2ISSN -2249-555X.
3. Padmalochan Mahanta, G. P. (November 2012). STATUS OF MICROFINANCE IN
INDIA - A REVIEW. International Journal of Marketing, Financial Services Man-
agementResearch,Vol.1Issue 11.
20International Education Research Journal [IERJ]
Research Paper E-ISSN No : 2454-9916 | Volume : 4 | Issue : 12 | Dec 2018